diff --git a/eth/handler.go b/eth/handler.go
index a67d956fb..f002727f3 100644
--- a/eth/handler.go
+++ b/eth/handler.go
@@ -53,9 +53,11 @@ type ProtocolManager struct {
 	txSub         event.Subscription
 	minedBlockSub event.Subscription
 
+	// channels for fetcher, syncer, txsyncLoop
 	newPeerCh  chan *peer
 	newHashCh  chan []*blockAnnounce
 	newBlockCh chan chan []*types.Block
+	txsyncCh   chan *txsync
 	quitSync   chan struct{}
 
 	// wait group is used for graceful shutdowns during downloading
@@ -76,9 +78,9 @@ func NewProtocolManager(protocolVersion, networkId int, mux *event.TypeMux, txpo
 		newPeerCh:  make(chan *peer, 1),
 		newHashCh:  make(chan []*blockAnnounce, 1),
 		newBlockCh: make(chan chan []*types.Block),
+		txsyncCh:   make(chan *txsync),
 		quitSync:   make(chan struct{}),
 	}
-
 	manager.SubProtocol = p2p.Protocol{
 		Name:    "eth",
 		Version: uint(protocolVersion),
@@ -118,13 +120,14 @@ func (pm *ProtocolManager) Start() {
 	// broadcast transactions
 	pm.txSub = pm.eventMux.Subscribe(core.TxPreEvent{})
 	go pm.txBroadcastLoop()
-
 	// broadcast mined blocks
 	pm.minedBlockSub = pm.eventMux.Subscribe(core.NewMinedBlockEvent{})
 	go pm.minedBroadcastLoop()
 
+	// start sync handlers
 	go pm.syncer()
 	go pm.fetcher()
+	go pm.txsyncLoop()
 }
 
 func (pm *ProtocolManager) Stop() {
@@ -135,7 +138,7 @@ func (pm *ProtocolManager) Stop() {
 	pm.quit = true
 	pm.txSub.Unsubscribe()         // quits txBroadcastLoop
 	pm.minedBlockSub.Unsubscribe() // quits blockBroadcastLoop
-	close(pm.quitSync)             // quits the sync handler
+	close(pm.quitSync)             // quits syncer, fetcher, txsyncLoop
 
 	// Wait for any process action
 	pm.wg.Wait()
@@ -150,11 +153,12 @@ func (pm *ProtocolManager) newPeer(pv, nv int, p *p2p.Peer, rw p2p.MsgReadWriter
 }
 
 func (pm *ProtocolManager) handle(p *peer) error {
-	// Execute the Ethereum handshake, short circuit if fails
+	// Execute the Ethereum handshake.
 	if err := p.handleStatus(); err != nil {
 		return err
 	}
-	// Register the peer locally and in the downloader too
+
+	// Register the peer locally.
 	glog.V(logger.Detail).Infoln("Adding peer", p.id)
 	if err := pm.peers.Register(p); err != nil {
 		glog.V(logger.Error).Infoln("Addition failed:", err)
@@ -162,14 +166,16 @@ func (pm *ProtocolManager) handle(p *peer) error {
 	}
 	defer pm.removePeer(p.id)
 
+	// Register the peer in the downloader. If the downloader
+	// considers it banned, we disconnect.
 	if err := pm.downloader.RegisterPeer(p.id, p.Head(), p.requestHashes, p.requestBlocks); err != nil {
 		return err
 	}
-	// propagate existing transactions. new transactions appearing
+
+	// Propagate existing transactions. new transactions appearing
 	// after this will be sent via broadcasts.
-	if err := p.sendTransactions(pm.txpool.GetTransactions()); err != nil {
-		return err
-	}
+	pm.syncTransactions(p)
+
 	// main loop. handle incoming messages.
 	for {
 		if err := pm.handleMsg(p); err != nil {
diff --git a/eth/sync.go b/eth/sync.go
index 8e4e3cfbe..a25d4d4fd 100644
--- a/eth/sync.go
+++ b/eth/sync.go
@@ -2,6 +2,7 @@ package eth
 
 import (
 	"math"
+	"math/rand"
 	"sync/atomic"
 	"time"
 
@@ -10,6 +11,7 @@ import (
 	"github.com/ethereum/go-ethereum/eth/downloader"
 	"github.com/ethereum/go-ethereum/logger"
 	"github.com/ethereum/go-ethereum/logger/glog"
+	"github.com/ethereum/go-ethereum/p2p/discover"
 )
 
 const (
@@ -20,6 +22,10 @@ const (
 	notifyFetchTimeout  = 5 * time.Second        // Maximum alloted time to return an explicitly requested block
 	minDesiredPeerCount = 5                      // Amount of peers desired to start syncing
 	blockProcAmount     = 256
+
+	// This is the target size for the packs of transactions sent by txsyncLoop.
+	// A pack can get larger than this if a single transactions exceeds this size.
+	txsyncPackSize = 100 * 1024
 )
 
 // blockAnnounce is the hash notification of the availability of a new block in
@@ -30,6 +36,94 @@ type blockAnnounce struct {
 	time time.Time
 }
 
+type txsync struct {
+	p   *peer
+	txs []*types.Transaction
+}
+
+// syncTransactions starts sending all currently pending transactions to the given peer.
+func (pm *ProtocolManager) syncTransactions(p *peer) {
+	txs := pm.txpool.GetTransactions()
+	if len(txs) == 0 {
+		return
+	}
+	select {
+	case pm.txsyncCh <- &txsync{p, txs}:
+	case <-pm.quitSync:
+	}
+}
+
+// txsyncLoop takes care of the initial transaction sync for each new
+// connection. When a new peer appears, we relay all currently pending
+// transactions. In order to minimise egress bandwidth usage, we send
+// the transactions in small packs to one peer at a time.
+func (pm *ProtocolManager) txsyncLoop() {
+	var (
+		pending = make(map[discover.NodeID]*txsync)
+		sending = false               // whether a send is active
+		pack    = new(txsync)         // the pack that is being sent
+		done    = make(chan error, 1) // result of the send
+	)
+
+	// send starts a sending a pack of transactions from the sync.
+	send := func(s *txsync) {
+		// Fill pack with transactions up to the target size.
+		size := common.StorageSize(0)
+		pack.p = s.p
+		pack.txs = pack.txs[:0]
+		for i := 0; i < len(s.txs) && size < txsyncPackSize; i++ {
+			pack.txs = append(pack.txs, s.txs[i])
+			size += s.txs[i].Size()
+		}
+		// Remove the transactions that will be sent.
+		s.txs = s.txs[:copy(s.txs, s.txs[len(pack.txs):])]
+		if len(s.txs) == 0 {
+			delete(pending, s.p.ID())
+		}
+		// Send the pack in the background.
+		glog.V(logger.Detail).Infof("%v: sending %d transactions (%v)", s.p.Peer, len(pack.txs), size)
+		sending = true
+		go func() { done <- pack.p.sendTransactions(pack.txs) }()
+	}
+
+	// pick chooses the next pending sync.
+	pick := func() *txsync {
+		if len(pending) == 0 {
+			return nil
+		}
+		n := rand.Intn(len(pending)) + 1
+		for _, s := range pending {
+			if n--; n == 0 {
+				return s
+			}
+		}
+		return nil
+	}
+
+	for {
+		select {
+		case s := <-pm.txsyncCh:
+			pending[s.p.ID()] = s
+			if !sending {
+				send(s)
+			}
+		case err := <-done:
+			sending = false
+			// Stop tracking peers that cause send failures.
+			if err != nil {
+				glog.V(logger.Debug).Infof("%v: tx send failed: %v", pack.p.Peer, err)
+				delete(pending, pack.p.ID())
+			}
+			// Schedule the next send.
+			if s := pick(); s != nil {
+				send(s)
+			}
+		case <-pm.quitSync:
+			return
+		}
+	}
+}
+
 // fetcher is responsible for collecting hash notifications, and periodically
 // checking all unknown ones and individually fetching them.
 func (pm *ProtocolManager) fetcher() {